The music industry is constantly changing because of new technologies coming around and allowing easier/cheaper ways to listen and download music such as file sharing (eg. lime-wire), Spotify, We7 and even YouTube.
YouTube, Spotify and We7 are not illegal however, they have caused a lot of arguments in the media as they allow people to listen to music for free, this has been reducing artist's revenue. By using YouTube to watch/listen to music, the audience may send the link to peers using social networking sites (eg. MySpace, Facebook, Bebo) causing more fans and therefore more consumers of the product however, this may only cause popularity and not actually revenue. Spotify has so many songs available to listen to on a computer for free, just like iTunes but without having to pay a price, therefore it's no wonder consumers chose to use this technology instead of buying album/singles off of iTunes which will become 'old' after a few months.
Lime-Wire and Bearshare are only a few of many illegal file sharing examples. This works by people sharing their music online and others downloading this, which is basically stealing from the artist. The government are trying to find people doing this and charging them to try and prevent this.
Some artists have chosen to 'go with the flow' with these changes by:
1. giving their albums out for free in newspapers (eg. McFly, Prince)
2. giving fans their music for free and allowing them to pay how much they think it's worth.
This has caused major viral advertisement which means it is cheap to advertise so maximum profit is made. Personally, I feel this is a good way to go about it as it would be too difficult to find people that are downloading music illegally, as well as very time consuming. I feel that technology is changing so speedily that the music industry must follow it if it is to be successful.